After a 12-Year Battle Over Legal Fees, California Court Upholds a $21 Million Cut in Fees

Posted on November 21st, 2017 by Legal Fee Advisors

By Jillian Robbins.

In 1978, Plaintiff Charles Woosley, a tax attorney, filed a class action lawsuit against the State of California, arguing that higher taxes on cars purchased out of state were unconstitutional. The Plaintiff finally achieved some success on his claims in 2005, but since then, he and the three law firms he employed over the years to assist with the claims had been in litigation against the State surrounding an award of attorney’s fees. In 2005, the California trial court awarded over $23 million in attorney fees. The Court, however, subtracted almost 3,000 of Woosley’s hours because they were “unnecessary and/or duplicative of the services rendered by other counsel, or not for the benefit of the class.” The Court also ruled that some of the work he billed for could have been performed by paralegals or legal assistants.

In 2010, the California Court of Appeals held that the billing records supported the award, but that the trial court neglected to give consideration to a crucial factor: the lack of success in the case – the class had diminished severely over the years and there was no success in the case for 14 years. The claims that were successful, the Court determined, were not particularly complex or novel as to warrant such a high fee award. The Court reversed the fee award, and instructed the trial court to conduct a new hearing in order to determine the proper amount of reduction based on the lack of success in the aforementioned 14-year period.

In 2014, on remand, the California trial court dramatically reduced the amount of fees: it declined to award any fees for one firm’s work over a period of seven years (over 3,000 hours) because the billing records lacked sufficient detail to determine what work was performed. The Court also held in place the reduction to Woosley’s fees because a vast amount of the work he did (thousands of hours) was already being performed by other law firms, and was therefore held duplicative and unnecessary. Additionally, the Court determined that Woosley’s expenditure of the equiavalent of 19 working weeks over a 14-year period on internal and external communications was “excessive and unreasonable.” Thus, in contrast to the original $23 million awarded, the Court awarded only $2,476,938.24 to all counsel involved.

This brings us to present day: the California Court of Appeals was again faced with the task of deciding whether or not the trial court abused its discretion in determining its award. The Court determined that, after the trial court held a week-long evidentiary hearing and scanned thousands of pages of billing records in order to make its determination, the trial court did not abuse its discretion for the most part. The Court did, however, determine that the trial court had erred in denying a law firm’s motion to reopen seven years of billing records that the trial court had declined to consider. The Court deemed that this was an abuse of discretion because the firm showed good cause for reopening the evidence. In making this determination, the Court noted that these billing records were used by courts in the past two fee determinations, and that refusing to review these records was an “inadvertent omission.”

Overall, the Court determined that there was no abuse of discretion on the part of the trial court when determining the amount of fees to be awarded. It explained that since the trial court conducted a “line-by-line review of all billing records submitted” and thoroughly explained why it made the reductions that it did, the Court of Appeals stated that it saw “no basis to upset [the trial court]’s determinations as to what time was reasonable and necessary.”

This case demonstrates that no matter the length of any litigation, courts will not hesitate to thoroughly examine attorneys’ billing records in order to detect any signs of improper, vague, or duplicative billing. This case exemplifies how meticulous a court can be in going through attorneys’ billing records.